Why The Fed Lowered Rates - My Opinion Part I

There has been a lot of speculation as to why the Fed lowered interest rates by 50bp.

My opinion is the Fed realized the pressure of a stronger US-Dollar and stronger US economy, headed into the POTUS election accompanied with new spending/policy related to a new POTUS, could put the global markets under extreme currency/economic pressures.

So, in order to provide more breathing room for the global economies, the US Fed decreased rates, taking a bit of pressure off currency rate divergences and allowing global central banks a bit of room to manage their economies against the 900-lb Gorilla (which is the US economy/US-Dollar).

In short, the US Fed needed to alleviate pressure put on the Global markets because of the 900-lb Gorilla US economy.

Not to save the US economy from an internal crisis...

But to save the world from a crisis of their own making. A Global Credit/Debt crisis has been brewing since before 2008.

The US Fed "gave in" and decided they had to decrease rates to reduce the risk of a foreign market contagion event (currencies/debt).

In my opinion, that is the only reason the Fed lowered rates.

Get some.

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